Over the last 4 years — from the summer after high school graduation through the summer before his senior year — Jack banked about $2,000 a year from his summer jobs. This allowed him to forgo the $2,000 per year in Federal Direct Unsubsidized Loan he would otherwise have needed to borrow for the costs of attending his university. It cut the principal and interest he’ll pay each month on his student loans by a third. It’ll also reduce the total amount he repays on those loans under the “standard” 10-year repayment plan by a whopping $11,200. That’s a darned healthy bite out of Jack’s borrowing costs.

Another cost saver is attending summer school at a community college close to home so the student doesn’t incur expenses for room and board. This is particularly effective during the summers after student’s freshman and sophomore years, when they’re likely to pick up courses that’ll count toward degree requirements at their universities.

Jill took this approach. Over two summers, she completed a total of 15 credit hours at her local community college. Tuition and required fees there were $117 per credit hour, versus $321 per credit hour at the university Jill attended fall through spring.

In doing this, Jill reduced the number of semesters it took to fulfill her university degree requirements from eight to seven. This cut her costs at that institution by $4,825 in tuition and fees and by $5,220 in room and board. So for $1,760, Jill cut her costs by $10,045 — a net savings of $8,285.

And the good news is that this isn’t an either/or proposition. Summer work? Summer community college classes? Many students do both!

Jack and Jill still get lots of summer “down time.” They still get to see friends they missed while away at school. And they still get to eat that good home cooking and to be with family. But their summers are also highly productive, because they significantly reduce the cost of their degrees — and what’s not to like about that?

Looking for strategies to keep college more affordable? Feel free to contact College Affordability Solutions at collegeafford@gmail.com or (512) 366-5354.

Your daughter’s freshman year financial aid offer includes a work-study award which’ll provide her a part-time job while she’s enrolled. Should she or shouldn’t she accept this award?

Many parents don’t want their children to work at school, especially during their first year. Moms and dads worry about their children adjusting to totally new environments and rigorous, college-level course loads. They reason that the pressure of jobs will be too much.

Such concerns are sometimes legitimate. But research shows they’re often wrong. In fact, studies have long shown that freshmen who work while taking classes earn higher GPAs and persist at higher rates than freshmen who don’t. The key is to control the student’s work hours. Ten to 14 hours a week seems to be optimal for most freshmen.

On the other hand, GPAs fall and dropout rates rise as students work more and more hours beyond 14 per week. These “over-workers” report that they find it difficult to attend classes, meet with professors, and get to the library. Think about that last point — no other on-campus service is open longer each day than the library so, if your student can’t get there, she probably can’t access other academic support services.

But working 10-14 hours a week can have several positive effects. It helps reduce reliance on loans. It allows students to pay some of their own costs, giving them the motivation that comes from “investing” their blood, sweat, and tears to “earn” an education. And working students typically become better time managers.

On-campus work can provide students with a “home base” at colleges that sometimes seem overwhelmingly large. And on-campus supervisors know their employees are students first, then workers. This tends to make them more tolerant of schedules that work around exams and tests.

Finally, working while enrolled usually helps with job and graduate school searches. Many ex-supervisors — including faculty members — are willing to provide references, and college employment demonstrates “real world” experience, strengthening the student’s resume even if the work she did wasn’t related to her career choice.

So you may want to advise your student to accept work-study. Absent such an offer, point her toward the student employment office when she gets to campus to seek other part-time positions. Don’t let unfounded fears stop her from taking advantage of the many positive outcomes associated with working a controlled number of hours per week.

College Affordability Solutions brings 40 years experience to advising families and students on higher education funding strategies. Feel free to contact us if we can assist you.

Soon after the upcoming college commencement season you’ll begin hearing it. “Who got me into all this debt?” or “My school made me take out all those loans!”

There’s truth in this. College costs keep rising. Grants and scholarships aren’t keeping up. But two other parties also contribute to rising collegiate debt — the student and, often, his parents.

Is your student spending conservatively — e.g. buying used textbooks from an online discount bookstore, not buying all his textbooks but accessing some through the campus library’s ebook collection?

Many off-campus residences sell themselves as “high amenity” facilities. But they’re also high rent. Is living in a new high-rise with a rooftop pool and granite countertops really necessary? Can your student survive someplace that’s older, plainer, and less costly? Can he split rent with one or more roommates, eat out less often, put a brown bag lunch in his backpack and cook more meals at home?

Does he absolutely need an automobile at school? He’ll likely pay hundreds to put it in some remote, vandalism-prone parking lot. Instead, can he use campus shuttle buses and municipal transit lines? Can he share rides home?

Can he work part-time? Contrary to popular belief, students who work 10-14 hours per week while enrolled perform better academically than students who don’t work at all.

Parents? You probably think your Expected Family Contribution (EFC) is too high. But EFC is based on a reasonable assumption — that you’ll max out your own financial resources before asking your neighbors to pay for financial aid to send your student to college.

So can you downsize your vacations; maybe even turn some into “staycations?” Can you get another few years out of your car? Do you really need to hire out the house cleaning or yard work? Or can you redirect such discretionary spending to support your student?

Most colleges offer the maximum loan amounts for which students are eligible. But your student need not accept all that debt. Minimize his costs and maximize your EFC, then reject any loan amount you don’t expect to need. If you miscalculate, what you turn down can be reinstated later.

Remember, students who borrow to live like professionals while in college often live like students while paying off their debts after college! Keep this from happening to your student by downsizing or rejecting loan offers now.

Your federal tax return is due April 18. Be sure to claim any of the 4 educationally-related tax benefits for which you qualify. They help reduce the taxes Americans pay by over $18 billion a year; so they’ll help you cut costs today and give you more to apply toward next year’s educational expenses.

Two personal tax credits — amounts subtracted from income taxes you’d otherwise pay — apply to learning after high school:

(1) American Opportunity Credit: Get a credit of up to $2,500 per student paid in 2016 for a student’s “Qualified Educational Expenses” while he worked toward his degree or certificate. This credit is limited to 4 tax years or the student’s first 4 years in postsecondary education. Forty percent of it is refundable — i.e. you’ll get money back even if you made too little to pay federal income taxes.

(2) Lifetime Learning Credit: This credit covers up to $2,000 you paid toward each student’s “Qualified Educational Expenses” in 2016. The student’s coursework need not have counted toward a degree or certificate. Also, there’s no limit on the number of years for which this credit is available. However, it’s not refundable.

Your student’s school should have provided him with a Tuition Statement (IRS Form 1098-T) showing tuition and fees paid to help you claim these credits.

There are also two educational deductions that’ll reduce your federal taxable income:

(3) Student Loan Interest Deduction: Deduct up to $2,500 of the interest you paid on certain loans you borrowed for “Qualified Educational Expenses” paid while you worked at least half-time toward a degree or certificate. You may deduct simple interest, capitalized interest, and any origination fees you paid in 2016.

If you paid $600 or more in student loan interest, your lender should have sent you a Student Loan Interest Statement (IRS Form 1098-E) to help you claim this deduction.

(4) Tuition and Fee Deduction: Reduce your taxable income by up to $4,000 for what you paid toward a student’s 2016 postsecondary tuition and required fees.

To be eligible for each tax benefit described above, your “Modified Adjusted Gross Income” must be below a certain amount. In all cases, the student must be you, your spouse, or a dependent you count as a tax exemption. And except for the Student Loan Interest Deduction, you may only claim only one of these benefits for any tax year.

There’s lots more information about these tax benefits — including information about Qualified Educational Expenses and Modified Adjusted Gross Income — in IRS Publication 970. Look it over, and don’t miss out on the tax benefits to which you’re entitled during or after college!

Got questions about how to keep a college education affordable? Contact College Affordability Solutions at collegeafford@gmail.com or (512) 366-5354.

ED and IRS reminded parent and students that the online FAFSA continues to operate and that, to load data onto that FAFSA that would have come from the DRT, they can access paper copies of their federal tax returns and/or pay stubs, then manually transfer those data to their FAFSAs.

FAFSA filers can also get their 2015 “tax transcripts” from the IRS in order to secure the data they need. These transcripts can be downloaded online from the IRS’s Get Transcript Online website.

College Affordability Solutions will keep you posted on new developments regarding this problem in future bulletins that will be posted on this website.

If you work for a 501(c)(3) or some other tax-exempt organization and are hoping to have some of your federal student loan debt discharged under the Public Service Loan Forgiveness (PSLF) program, you may be in for a rude shock.

In a March 30 story, the New York Timesreports that the U.S. Department of Education (ED) is taking the position that thousands of PSLF approval letters sent by FedLoan Servicing Servicing, the company ED hired and supervised to administer PSLF, were invalid.

FedLoan’s letters reportedly confirmed to borrowers that the jobs they held with nonprofit organizations qualified them for PSLF. However, many of these decisions wete retroactively declared invalid, and affected borrowers got no explanations or opportunities to appeal. According to the Times, four borrowers and the American Bar Association have gone to court against ED to restore those borrowers’ lost PSLF eligibility.

What should you do if you get caught up in this mess? Ultimately you, too, may have get a lawyer and take ED to court. But you should also:

* Contact your U.S. representative and senators to ask them to intervene with ED on your behalf; and

* Most of all, whether or not you’ve been informed that ED has invalidated correspondence you’ve received from FedLoan, keep working with your employer to submit your PSLF certification form once a year; and stay on top of of this issue by monitoring for developments related to it on the internet, in the news media, or on this website.

College Affordability Solutions will its best to keep you posted on this in the future.